The Trump administration rolled out a significant policy proposal aimed at reducing the prices that Medicare pays for prescription drugs covered under the Part B medical benefit. While the policy is positioned as a “pilot” covering half the country, it will, if implemented as proposed, bring substantially greater disruption to drug pricing, contracting and distribution than purportedly envisioned by the government. Manufacturers with drugs covered under the medical benefit will need to fully reevaluate their strategies to adapt.

When President Trump announced at the Department of Health and Human Services that the federal government would be taking “revolutionary” action on drug prices, he had harsh words for the “global freeloading” by foreign nations that demand low prices while saddling Americans with the high prices that fund pharmaceutical industry R&D. And he came with a plan: Medicare Part B prices will be lowered by indexing to drug prices in other wealthy nations.

The Trump administration rolled out a significant policy proposal aimed at reducing the prices that Medicare pays for prescription drugs covered under the Part B medical benefit. While the policy is positioned as a “pilot” covering half the country, it will, if implemented as proposed, bring substantially greater disruption to drug pricing, contracting and distribution than purportedly envisioned by the government. Manufacturers with drugs covered under the medical benefit will need to fully reevaluate their strategies to adapt.

When President Trump announced at the Department of Health and Human Services that the federal government would be taking “revolutionary” action on drug prices, he had harsh words for the “global freeloading” by foreign nations that demand low prices while saddling Americans with the high prices that fund pharmaceutical industry R&D. And he came with a plan: Medicare Part B prices will be lowered by indexing to drug prices in other wealthy nations.